A new report says rising costs will likely remain a key concern for businesses.
The study by the Business Development Bank of Canada said 75 per cent of businesses say rising costs have affected their business.
And, it said, while some input prices have and will come down, the price of energy is expected to remain elevated as extreme weather affects electricity output, increased demand continues to wait for new investments, and geopolitical situations keep gas prices high.
The report said businesses should focus on improving business processes to identify inefficiencies before investing in new technologies that can potentially help cut costs, such as automation and artificial intelligence tools.
The report also said another key trend will be how businesses adapt to zoomers, those born between 1997 and 2012.
That cohort is significantly more likely to pay extra for environmentally friendly clothes, shoes, and accessories compared with other generations. That means once the entire zoomer generation reaches adulthood by 2030, the market for environmentally friendly products and services should continue to expand.
Other key trends shaping the future for businesses identified by the report were labour shortages and the rapid pace of technological change.
When it comes to the need for more skilled workers, the report said nearly 70 per cent of future job openings will require post-secondary education or management skills – areas currently reporting the lowest unemployment rates.
The report cautioned there is a significant gap in preparedness, primarily among small businesses of less than 100 employees. Among businesses anticipating worsening labour challenges, one-third are not planning strategies for hiring, training, or retaining employees.
Meanwhile, 82 per cent of businesses surveyed said they already consider technology critical and 38 per cent anticipate significant disruption from new technologies.
“We are past the point where adopting new technologies is good advice; it is mandatory,” said Pierre Cleroux, BDC’s vice-president of research and chief economist.
“Increasing costs, changing consumer behaviours, labour shortages and technological trends all interact with one another. By adopting new technologies, small businesses can turn potential disruptions into opportunities to shape their own future and drive their business forward.”